UK boasts highest paid CEOs in Europe
The UK has the highest paid CEOs in Europe, according to a comprehensive new study released by Vlerick Business School.
The study looked at the annual reports of all listed companies in Belgium, France, Germany, and The Netherlands – and those of the FTSE 100 in the UK.
Financial data was analysed separately for two categories; companies with total assets of between €1 and €5 billion and companies with total assets of over €5 billion.
The median total compensation of a UK CEO of a company with total assets over €5 billion was found to be just over €4.700.000. The next best paid CEOs were found in Germany at €3.100.00. In contrast, the lowest CEO compensation packages were found to be in Belgium at €1.980.00 and France at €2.290.000
Virtually all the FTSE 100 companies (99%) still use cash bonuses to reward their top management but the value of these has dropped 20% since 2010.
In the UK, over the same period, the value of all incentives such as bonuses, stock options and shares has dropped 35%; which may explain why there was an 8% drop in the total CEO pay. Nevertheless, there was a 2% increase in incentives as a proportion of pay. In Belgium, combined incentives account for 30% of a CEO’s remuneration, whilst in Germany these make up to nearly 60%.
Xavier Baeten, a professor at Vlerick Business School commented: "One positive aspect revealed by our data is the way firms are using KPIs – more and more companies are moving towards offering non-financial incentives to motivate their CEOs. This means that companies are looking at what motivates people beyond financial incentives, which may lead to better performance. Furthermore, I believe CEOs have lost their confidence in being rewarded in shares as they are afraid the share price will drop. "